The DIBS Method... No Free Lunch continues

Hi CkM8 ,

Nice trade on the GBP/USD . Dont ya just love it when an I/B makes a break and never looks back ? Again , Great trade ! Hope you keep making the PIPS ! DIBS is a powerful method due to its low risk/high return potential. PC was very generous in sharing it . I wish he would contribute here on FF again.


Best in Life,

EZ

Is this System profitable? Has anyone mt4stats?

You have not been paying attention........
Do your own homework........

Read the first thread of this post, and the link to the original thread. This is a real life experience of a former CME trader. Absolutely inspiring.

Is there only 1 Trade per pair or can i take more IB?

DO some reading.... then come back and ask some intelligent questions.....
START HERE

I learned the method long after Peter Crowns was gone (I have printed all his posts to study). I'm very grateful for the knowledge he shared here. I wish I was around at the beginning to let him know my appreciation.

Many newbies get thrown off because of the simplicity of the method. But that's the thing about trading. It's actually pretty simple.

Also many thanks to FF for allowing a place where we can all benefit from each other on our trading journey.

Best Regards

GBP/USD: Already a "free trade"
I like it when it happens really early in the session. Those were the 2 first bars of the session

Edit: Can't post a chart right now but the trade reversed and the second half got stopped out

I know it can be tough to do but seriously go back and read the thread, post for post, page for page. No one is going to give you a hard time if you read the whole thing and ask a question because the questions you will ask will be more intelligent, more in depth and will usually show that you have taken some TIME to read and understand the method.

If you want a quick fix to your trading journey heres a pointer. BANK you MONEY, at least the 2 or 3% interest is somewhat guaranteed. If you dont want to take the time to learn, understand and progress then that 3% is literally gold compared to the 95% of failures that dont even reach that total.

Dont expect anything kinder from other threads, they will more or less tell you the same thing.

Razor

nice easy 60 pips this morning, lets see how far it goes.

pushed through 1.6600, + 120pips so far

what a difference 30 mins can make

Ouch!!
How you got some?

stopped out +60, better than nothing

+1 is better then anything minus

Rusty

At least you gave it a go at trying to secure more pips than average joe. +60 is still a great resul.

Razor

I've been back testing DIBS using the limited intra-day data that I have. These results are using the Euro futures contract (6E) for the last 3 months - from 1/6 to 21/8.

Its a bit better than the results for the whole year but still representative.

Conclusions
- DIBS has a solid edge
- Getting the most from DIBS requires letting your winners run
- Conversely taking partial profits at <50 pips is counter productive

Besides the normal DIB entry rules I added the following simple (ie not optimised) rule for taking profits and moving stops.
- take profits on hourly close with over 100 pips profit
- move stops to break even on hourly close with over 25 pips profit

Wins 8, pips won 1027, avg win 128, %win 23
Losses 21, pips lost 430, avg loss 20 %loss 60
break even 6, %break even 17

Total pips 597 (expectancy 21 pips)
Win/Loss ratio 6.27
Profit factor 2.39
Kelly ratio 16%

Individual Trades (Euro price x 100, times are in GMT+6)
Time of bar open, direction, open price, close price, profit, number of bars
05/06/2009 06:00:00 short 141.80 140.23 1.57 4
09/06/2009 08:00:00 long 139.47 140.64 1.17 7
11/06/2009 03:00:00 long 140.44 139.96 -0.48 1
12/06/2009 04:00:00 short 140.54 139.40 1.14 6
15/06/2009 06:00:00 short 138.50 138.73 -0.23 1
19/06/2009 07:00:00 long 139.18 139.17 -0.01 12
22/06/2009 03:00:00 short 138.85 138.86 -0.01 8
24/06/2009 08:00:00 short 140.58 139.20 1.38 7
01/07/2009 02:00:00 short 140.25 140.42 -0.17 1
01/07/2009 09:00:00 long 140.85 141.86 1.01 3
02/07/2009 02:00:00 long 141.17 141.04 -0.13 1
02/07/2009 06:00:00 short 140.83 139.57 1.26 12
03/07/2009 08:00:00 long 140.08 139.86 -0.22 4
08/07/2009 06:00:00 long 139.11 138.98 -0.13 3
09/07/2009 08:00:00 long 139.82 139.49 -0.33 3
10/07/2009 06:00:00 short 139.03 139.20 -0.17 2
13/07/2009 07:00:00 long 139.67 139.38 -0.29 3
14/07/2009 05:00:00 long 140.03 139.84 -0.19 1
15/07/2009 02:00:00 short 139.80 140.05 -0.25 1
15/07/2009 07:00:00 long 140.72 140.71 -0.01 14
16/07/2009 02:00:00 long 140.78 140.67 -0.11 1
16/07/2009 07:00:00 long 140.91 140.90 -0.01 19
22/07/2009 02:00:00 long 142.02 141.87 -0.15 2
22/07/2009 07:00:00 long 142.00 141.87 -0.13 2
24/07/2009 07:00:00 long 142.22 142.12 -0.10 2
30/07/2009 02:00:00 long 140.59 140.58 -0.01 2
30/07/2009 06:00:00 long 140.66 140.53 -0.13 3
03/08/2009 05:00:00 long 142.60 144.17 1.57 6
04/08/2009 08:00:00 short 143.84 143.97 -0.13 1
06/08/2009 07:00:00 short 143.93 142.76 1.17 26
11/08/2009 06:00:00 long 141.80 141.48 -0.32 1
13/08/2009 05:00:00 long 142.62 142.61 -0.01 10
14/08/2009 08:00:00 long 142.81 142.68 -0.13 1
17/08/2009 02:00:00 short 141.45 141.56 -0.11 1
19/08/2009 09:00:00 short 140.96 141.36 -0.40 1

Hi Jzw, shouldn't your win/loss ratio be 8 / 21 = 0.38 ??

Thanks

Hi, jzw,

forgive me the ignorance but (as my name reads) would you reffer me to how to find the "Kelly" number? Thanks!

ok - slightly misleading the text should read
Average Win/Average Loss 6.27

I'm calculating Kelly ratio using
%win - (%loss)/(Avg Win/Avg Loss)

In theory it gives the optimal fraction of your account to risk to maximise compounding. However you could never trade with that amount at risk.

If you are comparing two systems the one with the higher Kelly ratio should have a smoother equity curve and again in theory you could leverage it more than a system with a lower ratio.

Anyway the point of my post was not the specific numbers which will be different if you choose different time periods to test - it was that DIBS requires you to let winners run - thats how it can make money with a % winners of 23%, if you don't then DIBS will lose money.

If you look at the results for July there was a run of 15 consecutive losers and you might think that DIBS is not very good but actually its a very solid system. The Euro has been in a 3 month sideways consolidation and DIBS has been net profitable over that period.